Obesity alters metabolism including increasing insulin resistance and hepatic accumulation of triglycerides. Obesity also activates immune responses in adipose tissue (AT) including accumulation of adipose tissue macrophages (ATMs) (Weisberg, McCann et al. 2003, Xu, Barnes et al. 2003). AT releases chemokines that recruit circulating monocytes into AT which differentiate in ATMs. In a lipid-rich environment, ATMs accumulate lipid by mechanisms that have yet to be directly studied. (Prieur, Mok et al. 2011 , Cinti, Mitchell et al. 2005, Xu, Grijalva et al. 2013). Some work has implied that FFA are taken up by ATMs and re-esterified with glycerol to yield TG; others imply the direct release of triglycerides (TG) by select adipocytes in crown-like structures (Prieur, Mok et al. 2011 , Cinti, Mitchell et al. 2005, Xu, Grijalva et al. 2013). Nonetheless, obesity leads to the accumulation of neutral lipid in ATMs and induces lysosomal dependent lipid catabolism. The question my thesis tried to answer is how lipid is delivered to lysosomes. Autophagy of lipid droplets or lipophagy contributes to lipid catabolism in other cells, including hepatocytes and foam cells. We hypothesized that lipophagy would regulate lipid delivery for lysosomal dependent lipid catabolism in ATMs. Our data, however, demonstrated that lipophagy does not contribute to lysosomal dependent lipid catabolism in ATMs. Myeloid specific ablation of Atg7, a protein necessary for autophagosome formation, did not lead to alterations in lipid content of ATMs or in whole body metabolism. These finding suggested an endosomal-dependent delivery of lipid to lysosomes in ATMs. We found lipid in lipid vesicles, structures distinct from lipid droplets. These neutral lipid vesicles contain adipocyte specific proteins suggesting they are released from adipocytes. The adipocyte derived lipid vesicles also had the ability to differentiate bone marrow derived macrophages into ATM-like cells. Lipid vesicles provide a transport mechanism for lipids between adipocytes and ATMs, contributing to ATM differentiation. Our data suggest a complex interplay in lipid exchange between adipocytes and ATMs and a role for adipocyte derived vesicles in ATM differentiation.